KKR circles Asda after Sainsbury’s merger hits roadblock

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KKR Asda
// US private equity firm KKR reportedly mulling Asda takeover bid
// Follows CMA’s initial findings on proposed merger with Sainsbury’s
// CMA expressed “extensive” concerns about the merger and hinted it could block it all together

The proposed Sainsbury’s-Asda merger has been thrown into further doubt amid reports that US private equity firm KKR is eyeing a potential takeover bid for Asda.

According to The Sunday Times, KKR could would appoint senior adviser Tony De Nunzio as Asda’s chairman if it were to make a deal to acquire the Big 4 grocer.

De Nunzio himself used to be chief executive and president of Asda until 2005.

It comes after the CMA hinted it could block the proposed £12 billion merger of Sainsbury’s and Walmart-owned Asda.

In its provisional findings last week, the competition watchdog expressed “extensive” concerns about the deal and identified 629 locations where competition could be impacted.

The CMA added that the two grocers would need to sell at least 300 stores to a single buyer in order for the merger to be green lit, while highlighting it would be “difficult for the companies to address the concerns it had identified”.

KKR’s interest in Asda follows analyst speculation that Walmart may sell a stake to private equity or look to float all or part of the UK grocery retailer on the stock market.

Just days before the CMA’s provisional report was published, Asda unviled a one per cent uptick in its like-for-like sales for its fourth quarter period ending December 31.

The increase marked Asda’s seventh consecutive quarter of sales growth, although it was slower than the two per cent increase recorded in the third quarter.

Asda and KKR have declined to comment.

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10 COMMENTS

  1. I looked up the acronym for CMA, not sure what the A stood for. I found a list of 188 acronyms to read through in order to find the correct one. Why don’t you use the full name at any point in this article?

  2. It’s not Asda that are getting too big, its sainsbury and tesco you’ve got to keep an eye on, they’re the big ones out there. CMA stands for competition market authority who look in to these type of things

  3. “Roosevelt says, ‘We have nothing to fear but fear itself,’ but I say we have a hell of a lot to fear. I mean there’s the Germans, the Lidl’s, and the Aldi’s.

  4. Walmart want to divest some of their ASDA involvement and face the challenge they perceive will be coming from Amazon. In the USA Amazon bought a retailer (Whole Foods) and have opened a cashier-less store with lots of tech offering a highly convenient experience. Sainsbury’s want to bulk up and face the combined strength of Tesco/ Booker. The CMA let Tesco Booker merge which makes Tesco No1 in retail and wholesale food supply – hence Walmart thought they may let a sale through. These are interesting times.

  5. Sainsbury family are not the holder of the big shares anymore , all after the impossible in a shrinking market .lost their way .l helped to turn it from sunday trading years .( lost it now .

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